While rising interest rates are scaring off some potential homebuyers, investors with equity continue to flood the market – keeping real estate agents happy.
As such, the property market is dividing into two tiers, where the upper end is driving record price growth and those in the traditional mortgage-belt are starting to feel the pinch.
Century21 Maroubra real estate agent Theo Felekos said activity in the market is currently being driven by affluent people and foreign investors looking to add to their burgeoning property portfolio.
“There are a lot of foreign investors buying the fifth or sixth property of their portfolio who are keeping the market nice and solid,” Mr Felekos said.
It is these investors who are also keeping auction clearance rates sitting above traditional levels in both Sydney and Melbourne.
Statistics from RP Data show Melbourne performed well at auction last weekend, recording a clearance rate of 80.4 per cent.
Sydney also performed well, achieving a clearance rate of 73.2 per cent – well above the averages recorded during the global financial crisis.
Alan Lambert, managing director of LJ Hooker, said the middle and upper end buyers were keeping house prices ticking upwards.
“There is a renewed confidence among these buyers,” Mr Lambert said, with new listings during March and April about 10 per cent higher than this time last year.